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Nearly forty years of speculation and comment had taken place regarding various desert irrigation plans when, in 1892, a company out of Colorado sent Mr. C.R. Rockwood, an experienced irrigation engineer, to Yuma. While investigating the possibility of irrigating the Sonora, Mexico, desert area with water from the Colorado River, Rockwood found instead that such a project was more feasible into the Colorado Desert. The project was approved and the search for financial backing was begun. Rockwood was named as chief engineer.
Surveys revealed a total of two million acres in the Salton Basin and Baja California could be irrigated from a single canal project. The Salton Sink would serve as an area to receive drainage from the irrigation system. The company staked out the proposed route of the canal; yet, financial resources were slow to materialize leaving Rockwood to revise plans to a less expensive route.
In a further reorganization in 1896, a new investment group was formed, the California Development Company, with Mr. A. H. Heber of Chicago, Illinois, as president and Rockwood as vice president. Three years later, Rockwood himself headed the organization.
The search for financing eventually led to George Chaffey who originally had rejected the desert plan when Wozencraft had proposed it to him eight years previously. In the intervening years, Chaffey had experience and success with similar irrigation systems in the hot arid lands of Australia. He was now convinced that the Colorado Desert could become productive and well populated.
To help finance the canal system, another California Development Company subsidiary, the Imperial Land Company, sold shares of water stock through locally owned mutual water companies.
Chaffey began to dredge in August of 1900, creating a canal bed from Hanlon Heading to the border (a track less than five miles in length), then west for two to three miles to connect with the Alamo River channel. Minor excavation was needed for forty miles along the channel to Sharp's Heading. The central main canal went north and west to pass four miles east of the Calexico area. A lateral canal was built west of Calexico. On May 14, 1901, water was diverted from the Colorado River to the canal for the first time.
In June, water traversed the system all the way to Calexico. In the fall of 1901, 1,500 acres were under cultivation in the Calexico area, initiating the Imperial Valley agriculture industry.
During the next two years, more mutual water companies were formed, with the California Development Company building most of the distribution systems as well as the main canals and laterals to service these newly developed areas. W.F. Holt, who established the No. 7 Water Company and the town of Holtville, also built the Holton Power Co., a small hydroelectric plant, that began supplying the first electricity to the Holtville area in 1904. By 1905, eighty miles of main canals and 700 miles of distribution canals were in existence.
Previously, potable water was hauled south from Coachella Valley by railway car. With water finally available from the Colorado River, the population boomed. In 1901, few white men inhabited the Imperial Valley other than the surveyors working on the canals. In four years, by 1905, the residents numbered 12,000. Irrigated acreage had increased from 1,500 acres to 67,000 acres.